Confessions of a (shudder) .. C O I N .. dealer
topstuf
Posts: 14,803 ✭✭✭✭✭
Okay, since I retired this January, I got no ox to gore so here's the skinny on coin dealers.
When I first started in coins, my forte was skimming other DEALERS. I read voraciously
on coins and knew them forward and back. I started trading and "vest pocketing" and did
quite well (for part time work). I would visit Sacramento (notoriously CHEAPO town) and
buy at their ask and sell to other dealers (who had actual CUSTOMERS) and make a profit
doing so. Then I sold my business and began coins professionally in 1979.
Fortune favored me with the rip roaring 79-80 bullion market and we made tons of money.
I would venture to say that MOST existing dealers got their REAL push in those days.
Otherwise dealing in coins is not all that lucrative for a street address "buy and sell"
shop. It can be good for a major dealer who can afford to maintain a large presence and
trade coins with other dealers and cross-promote things. Or to establish a huge
business aimed at unknowledgeable "collectors" in the hinterlands and get mailing
addresses and sell pretty much crap coins to folks in the sticks. AND....of course,
send BUY lists to the nation.
In fact, you can speak to almost any Internet seller and they will also tell you that
much of their business is from out of the way places where no dealers exist. Grading
isn't an issue where no one can confirm what you get.
But opening your small coin shop will educate you in a hurry. Or bust your butt. What
a surprise I had when I got no..... COINS. The public doesn't HAVE any nice coins to
speak of. You will spend the day weighing rings and chains and filling out police
forms. You will see 12 jillion pre-1964 dimes, quarters, and halves. Silver dollars
will now THRILL you if you see one that is actually BU.
Back in 79-80, the AVERAGE silver dollar buy was 200 coins....per PERSON. Now it may be
5-20 circ Peace and 21's per DAY.
You will be amazed that if you offer a high price for almost ANYTHING, the seller will
decide to keep it or give it to the kids. Very few collectors will sell anything as
they now use the Internet to sell their stuff.
"Fun" will quickly leave your day to day coin transactions. The bright spots will be when a traveling dealer (some of them) shows up to sell you some decent coins or buy
some of the DRECK you have accumulated from your "WE BUY....RARE....COINS" ad in the
$1,000.00 per month yellow page ad.
You will see a LOT of coins that people want you to spend valuable time on. Free
appraisals; does this look real; no, I don't want to BUY a blue book.... etc etc etc.
The coins seen and posted on this forum are................NOT..........repeat...NOT..
the coins you will see from the public.
These are again the nice coins that trade between DEALERS.
And perhaps it is time for a lot of you to learn something new. Dealers .... ARE... collectors!
Just more advanced. Their knowledge is incredible. They make mistakes. I always told
people that I could remember EVERY mistake as it was costly. But knowledge is costly in
any field. You can spend it at Yale or spend it behind the counter.
Some "collectors" are the coin club mavens who attend every meeting and fleece more
people than all the "brick and mortar" dealers in town. But they maintain their
collector status due to their cash and carry wink at sales tax shenanigans. They ...
(usually)... want to open a shop someday. Many do. They are usually the first out of
business as they now have to acquire the ability to interact with the "public" and not
their usual source of patsys. However, much of this ilk is comprised of "retired"
military or civil service employees who just want to finance their collections with not
only free money from you and me, but also from your coin collections.
Did we buy low? As low as possible. But we had to compete. With 10-12 dealers in a
town, you don't get to RIP coins as many think. I would pay through the nose for NICE
stuff (after first tediously discerning whether this was a seller or a tire kicker) But
the nice stuff is very scarce....d'ohh!
All dealers of any sort of any merchandise or professional service are in business to
make money to feed families and stuff like that. Now that I'm retired, I am acquiring a
new appreciation of being a bum.
All stores of any sort have their own "tricks of the trade".......a ubiquitous phrase
that applies to -ALL- professions.
You may hear lofty statements from people in other fields who make their money in other
areas. What you won't hear is how some "bozo" paid your bid price for a new family room
because no one COLLECTS family rooms. Or gall bladder operations.... or family
trusts...or washers and dryers...or.....well, you get the picture.
BUSINESS IS BUSINESS! We are ...capitalists.....folks.
My philosophy is/was: When a customer no longer NEEDS a dealer, he will BECOME one.
And that applies to ........ALL......... professions and trades.
When I first started in coins, my forte was skimming other DEALERS. I read voraciously
on coins and knew them forward and back. I started trading and "vest pocketing" and did
quite well (for part time work). I would visit Sacramento (notoriously CHEAPO town) and
buy at their ask and sell to other dealers (who had actual CUSTOMERS) and make a profit
doing so. Then I sold my business and began coins professionally in 1979.
Fortune favored me with the rip roaring 79-80 bullion market and we made tons of money.
I would venture to say that MOST existing dealers got their REAL push in those days.
Otherwise dealing in coins is not all that lucrative for a street address "buy and sell"
shop. It can be good for a major dealer who can afford to maintain a large presence and
trade coins with other dealers and cross-promote things. Or to establish a huge
business aimed at unknowledgeable "collectors" in the hinterlands and get mailing
addresses and sell pretty much crap coins to folks in the sticks. AND....of course,
send BUY lists to the nation.
In fact, you can speak to almost any Internet seller and they will also tell you that
much of their business is from out of the way places where no dealers exist. Grading
isn't an issue where no one can confirm what you get.
But opening your small coin shop will educate you in a hurry. Or bust your butt. What
a surprise I had when I got no..... COINS. The public doesn't HAVE any nice coins to
speak of. You will spend the day weighing rings and chains and filling out police
forms. You will see 12 jillion pre-1964 dimes, quarters, and halves. Silver dollars
will now THRILL you if you see one that is actually BU.
Back in 79-80, the AVERAGE silver dollar buy was 200 coins....per PERSON. Now it may be
5-20 circ Peace and 21's per DAY.
You will be amazed that if you offer a high price for almost ANYTHING, the seller will
decide to keep it or give it to the kids. Very few collectors will sell anything as
they now use the Internet to sell their stuff.
"Fun" will quickly leave your day to day coin transactions. The bright spots will be when a traveling dealer (some of them) shows up to sell you some decent coins or buy
some of the DRECK you have accumulated from your "WE BUY....RARE....COINS" ad in the
$1,000.00 per month yellow page ad.
You will see a LOT of coins that people want you to spend valuable time on. Free
appraisals; does this look real; no, I don't want to BUY a blue book.... etc etc etc.
The coins seen and posted on this forum are................NOT..........repeat...NOT..
the coins you will see from the public.
These are again the nice coins that trade between DEALERS.
And perhaps it is time for a lot of you to learn something new. Dealers .... ARE... collectors!
Just more advanced. Their knowledge is incredible. They make mistakes. I always told
people that I could remember EVERY mistake as it was costly. But knowledge is costly in
any field. You can spend it at Yale or spend it behind the counter.
Some "collectors" are the coin club mavens who attend every meeting and fleece more
people than all the "brick and mortar" dealers in town. But they maintain their
collector status due to their cash and carry wink at sales tax shenanigans. They ...
(usually)... want to open a shop someday. Many do. They are usually the first out of
business as they now have to acquire the ability to interact with the "public" and not
their usual source of patsys. However, much of this ilk is comprised of "retired"
military or civil service employees who just want to finance their collections with not
only free money from you and me, but also from your coin collections.
Did we buy low? As low as possible. But we had to compete. With 10-12 dealers in a
town, you don't get to RIP coins as many think. I would pay through the nose for NICE
stuff (after first tediously discerning whether this was a seller or a tire kicker) But
the nice stuff is very scarce....d'ohh!
All dealers of any sort of any merchandise or professional service are in business to
make money to feed families and stuff like that. Now that I'm retired, I am acquiring a
new appreciation of being a bum.
All stores of any sort have their own "tricks of the trade".......a ubiquitous phrase
that applies to -ALL- professions.
You may hear lofty statements from people in other fields who make their money in other
areas. What you won't hear is how some "bozo" paid your bid price for a new family room
because no one COLLECTS family rooms. Or gall bladder operations.... or family
trusts...or washers and dryers...or.....well, you get the picture.
BUSINESS IS BUSINESS! We are ...capitalists.....folks.
My philosophy is/was: When a customer no longer NEEDS a dealer, he will BECOME one.
And that applies to ........ALL......... professions and trades.
0
Comments
<< <i>But opening your small coin shop will educate you in a hurry. >>
Opening any small business will educate you in a hurry, or you'll end up back working for somebody else, or go insane, or bankrupt...
Russ, NCNE
<< <i>Now that I'm retired, I am acquiring a new appreciation of being a bum >>
Now that sounds like something I would like to try
Russ wrote:
<< <i>Opening any small business will educate you in a hurry, or you'll end up back working for somebody else, or go insane, or bankrupt... >>
Well, it's a good thing your boss chose option #2, then.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
shairing your insights and views with us. Most informative. Kind of reminds me why I never wanted
to own a coin store, or be a coin dealer for that matter. While each type of career field has its own set of
problems, coin dealers have to rank in anguish right up there with school buss drivers.
Camelot
TBT
Tom
<< <i>Opening any small business will educate you in a hurry, or you'll end up back working for somebody else, or go insane, or bankrupt... >>
Good point Russ, Owning and running ANY business is tough. But I guess everybody thinks their own is harder than the rest.
<<<< "WE BUY....RARE....COINS" ad in the $1,000.00 per month yellow page ad.>>>>
It amazes me the amount of people that don't realize what it costs to operate a business, like the rip off phone company phone books. Business's have to pay a monthly fee to run their ads in the yellow pages even though it is printed once a year. Phone books are handed out free to people, but they are not free because business people pay for it. Also paying workers comp if you have employees, matching social security, insurance etc., etc. People used to come in the business I used to work at and asked why we charged this and that, and the owner would say because it cost's me $5,000 a year just for you to walk thru my door."What! " I have to have high insurance just so if you twist your ankle walking in we are covered for being held liable for your injury that we did not cause! Ok stop ranting now.
Pennies make dollars, and dollars make slabs!
....inflation must be kicking in again this dollar says spend by Dec. 31 2004!
Erik
When i was a kid coins were a hobby, now it's a jungle with the sharks eating everyone smaller then themselves and there are very few actuall coin shops left in the twincities minneapolis/st. paul.
I mean, it stunned me for a second, because it was so unexpected and unprovoked.
I share this amusing ancedote on this thread only because I am still awestruck that anybody would say that to a potential customer. To someone they don't know. Take my word for it, I wasn't pestering him, and I'm about as polite a guy as you're going to meet. I didn't call him on it.
There does seem to be a pretty high burnout rate amongst the shop owners. And I can well imagine they hate dealing with the public. But you know what? I play music in bars, and every profession has it's downside.
Clankeye
It was just one of those days that I found myself standing there scratching my head thinking "What is it about coins? What is it? That people act this way?"
If I ever figure out an answer--I'll let you know.
Believe me, in the scheme of things, I am well aware it wasn't that big a deal.
Edited to add: nice job with the thread Topstuf. Thanks for writing it.
Clankeye
I agreewith much of what you said. My local dealer has explained before much of your sentiments.
HOWEVER,
I am a pretty reasonable guy so before I really reply, I would like you to expound on this statement.
"However, much of this ilk is comprised of "retired"
military or civil service employees who just want to finance their collections with not
only free money from you and me, but also from your coin collections."
John
siliconvalleycoins.com
I suppose the most notable exception has to be the internet and ebay. Both not particularly favorable for dealers looking to aquire nice material. On the other hand, it has broadened their reach for buyers that are ready, willing and able.
If the influx of people in the hobby (due to the state quarters) materializes in interest in the obsolete issues, combined with the lower margins dealers are having to work on due to ebay, we very well could see some strong pricing pressure for years to come. Eventually the mantra will move from buy low sell high to buy high, sell higher.
When we are planning for posterity, we ought to remember that virtue is not hereditary.
Thomas Paine
I sell Barber Halves on Ebay. For key date coins the tracker shows usually 150-250 hits to the site in a seven day period. With Key walkers it is about double that number. My local dealer tells me I am one of only a few collectors that come around looking for Barbers. Their coin shop is loaded with key dates that Ebay bidders would have a frenzy for, yet the sit there in the display case with only an occasional window shopper looking at them.
The internet is so revolutionary and amazing that it almost makes me dizzy....wait...hold on...I feel like I am about to pass out.....
OK I am fine now.
Tyler
Arco, whats the nme of this shop?
F15+ 1896-O with great toning. Never have seen one on Ebay in three years that was original.
F15 1895-O
1900-S VF20
1907 VF30
1913 Barber quarter in F12
and this was just the new stuff since I was there last month.
roadrunner
My trouble was that I actually..........looked..........at the coins. Force of habit. Made the sellers think that I was "scheming" or sumpin. Especially if I went between books to grade or attribute. But the guy who opens a store on a main street and has a big sign and blithely says "I'll pay 12 bucks for this bunch" gets a huge amount of coins for almost nothing. And as you say, he knows nothing about grading and always had to call me or another dealer for a gray sheet price. I doubt he had ONE reference book.
But people are funny. If one can perfect the "dumb" act and "look" professional about it, he can get almost anything from the unknowing. Another example of "what is it about coins?"
I can't tell you how silly I think people are who don't leave their families ANY idea of what they have with an INDICATION of what it is worth. An educated seller is a boon to a dealer as it dispenses with all the .....games. The seller is immediately assured that he is not getting reamed when the dealer's price is close to the estimate. This applies not only to coins, but guns, cameras, stamps, etc.
I have resorted to fencing with a customer to the extent that I had to stop everything and tell them that I would price EACH coin and demand a "yes" or "no" on each. And I would provide the source for my prices so they could follow along. The old game of "waaaal.....ah doan know if ah'm a gonter sell it till ah knows how much EVVERTHANG is" is usually a dead giveaway that the seller either wants to see if the coins are worth STEALING from dad or is just wasting time for a free insurance appraisal.
but....
C'est la vie.
Coinlieutenant, my remarks were directed at trough feeding "public sector retirees" who rent a shop and make it into a "museum." Nothing is for sale. Pride is taken in SHOWING people stuff and having a double retail price on it just to feed the owner's ego. They are the ones who barely acknowledge a customer when he comes in the shop. They FEED on awe from sycophant toadies.
SOME....retired civil service/military folks run respectable shops and actually are in business to make money. One in Florida comes to mind immediately. I did considerable business with him and hold him in the highest regard.
I can compete with ANYONE who is on a level field. Competing with someone whose income comes from eternal monthly checks on my money is impossible. UNLESS........said party is actually in BUSINESS.
And....as I said....few last very long.
I have to say your correct. I do not want to be a dealer. I enjoy putting away a few choice pieces as I can get them. I am not going to be financing a coin... or doing a layaway. As far as each profession have it share of tricks of the trade I can only say How true. I can't count on a bank of transistors the number of a half handed, hash slingers I have run into in the computer business. Every manager will be up thier a** until some short period after they have moved on and the controlling management discovers I was right. Nothing is cheap and if it looks too good to be true it is. My profession is no different. Why do you think undertaking is such a lucrative profession..You gotta have it. The legislators have made it so. So bunk up it ain't so bad sooner or later lawyers will get around to legislating the carp out of numismatics and we will be back to slight of hand the old fashioned way.
Not suprised, Applause Topstuff!
Dan
First Place Winner of the 2005 Rampage design contest!
<< <i>
<< <i>But opening your small coin shop will educate you in a hurry. >>
Opening any small business will educate you in a hurry, or you'll end up back working for somebody else, or go insane, or bankrupt...........russ i like that part.........but think of all the fun we would be missing